‘A bird in the hand is worth two in the bush’. It’s the same when investing. Why chase ‘wild gooses’ when instead you can make potentially double digit, multi-decade returns sticking with dependable industry champions. 

Take ‘eagle-esque’ engineer Avingtrans  that sells and services (33% aftermarket) mission critical niche components to the energy, data centre, medical and nuclear power sectors. The majority of its £156.4m turnover is derived from regulated & non discretionary spend, driven by powerful secular trends that are little impacted by today’s concoction of tariffs, wars and geopolitical uncertainty. 

Better still this morning, after posting a ‘slightly ahead’ May FY’25 EBITDA (£16.7m) and net debt (£12.3m), Avingtrans reiterated its FY’26 guidance, supported by a robust orderbook that provides 90% visibility for this year and >50% for FY’27. 

Here, its engineering division (AES) supplies cooling systems for data centres (Ormandy Rycroft Engineering) and high tech pumps for nuclear power (re new & life extensions - Hayward Tyler). Alongside ‘blast-proof doors’ for HS2 & defence applications (Booth) and high integrity waste storage boxes for decommissioning at Sellafield (Metalcraft). 

What’s more in the last Spending Review, the UK government committed to its £4bn decommissioning programme - of which 75% has been allocated to Sellafield, one of AES’ largest clients. A further £40bn is also being invested in the new Sizewell C reactor, with Trump doing the same across the Atlantic. Nuclear energy and decommissioning represents 20.9% of #AVG’s turnover. 

Elsewhere, sales of Adaptix’s disruptive 3D X-ray technology are building across the veterinary and non-destructive testing (NDT) markets, with orthopaedic approval expected soon. Meanwhile Magnetica’s small form MRI scanner is making solid progress too, albeit with FDA authorisation now anticipated in H2’26 due to additional requirements (eg cyber). 

Both medical devices are targeting smaller “point-of-care” locations, where the main imaging players (eg GE, Philips and Siemens) generally do not operate as they’re focused on whole body hospital systems. Additionally, Magnetica’s scanner is designed to eliminate around 90% of the infrastructure costs (eg strengthened floors), which severely restrict where whole body systems can be sited. 

Wrt the FY’25 numbers, adjusted EBITDA & PBT was ‘slightly ahead’ of upgraded guidance at £16.7m (est £16.6m) & £8.6m (est £8.0m) on revenues up 14.5% YoY to a record £156.4m. Driven by a stand-out performance from AES (+20% EBITDA), offset by smaller than anticipated investments in medical (MII). Similarly adjusted EPS jumped 28% to 23.7p and the dividend was nudged up 4.2% to 4.9p, whilst net debt (excluding IFRS16) closed at £12.3m, handily below expectations of £14.5m. The latter after investing £13m in Magnetica and Adaptix. 

Looking ahead, Singer Capital Markets have a 580p/share target price (nb based solely on AES), and are forecasting FY’26 turnover, EBITDA & adjusted EPS of £183.2m (+17%), £20.0m (+20%) & 25.9p (+9%) respectively. On top Singer Capital Markets believe the medical devices division is worth another £85m-£140m, or 251p-422p/share. 

CEO Steve McQuillan commenting: “In Q1’25, the Group has performed in line with management expectations, with the strong momentum of FY25 continuing into FY26, bolstered by a series of contract wins in AES. The Board remains confident about the current strategic direction and potential future opportunities across both the AES & MII divisions, whilst continually monitoring market conditions."